Straw Into Gold, Resources Into Results

Educational resources have been the subject of endless political battles, including efforts to expand resources and to equalize them. However, the connections between resources and outcomes remain obscure: real spending per pupil has increased steadily without any obvious effect on learning; reform efforts often cost more without any corollary effects; and there is a great deal of evidence that additional resources do not have substantial effects on learning except under special conditions.

This paper presents the “new” school finance, one that—in contrast to most discussions about funding that have concentrated on spending patterns only—asks how resources are used within schools and classrooms, and whether they are used in ways that can enhance educational outcomes. This approach is not particularly new, since many researchers have called for more careful investigation of how resources are spent when their analyses failed to reveal clear relations between spending and outcomes. However the “new” school finance has not been the subject of consistent investigation, and there has been little progress in understanding the conditions under which spending will (or will not) enhance learning. This paper reviews a variety of literatures, from different areas of education, in order to clarify the implications of this perspective for researchers, for practitioners (like principals), and for policy makers.

While the “old” school finance perspective has usually assumed that additional resources are self-evidently valuable, it’s clear that there are many ways to spend resources to little effect. The first section of this paper details what might be called the political economy of waste: the political and organizational features of schools that lead to resources being spent with no potential effects on outcomes. The purpose of such a conceptualization is to clarify how difficult it might be to spend additional resources and enhance educational outcomes, however measured. It also leads to a series of hypotheses for what one might find in examining, the effects of any spending increases, suggesting the research strategy of asking “where the money has gone,” being careful to trace the effects of funding to the school and classroom levels.

The second section reviews several areas which have, contrary to the “old” school finance, tried to move beyond discussions of spending to more detailed analyses. The effective school literature is one such area, though it tended not to examine resource use and generally did not examine classrooms. The literature on educational production functions is another, with its tendency to conclude that “spending doesn’t make a difference.” But it generally fails to specify how resources are used within the schools, and therefore crucial variables—teacher experience, for example, or class size—may have either positive or negative effects on outcomes like test scores. The solution in both cases is to trace resources more carefully to the ways in which they are used within the classrooms and schools. In the case of educational production functions, this leads to more complex equations; teaching characteristics and student ability to benefit from instruction are two crucial variables, with resources influencing outcomes by improving either of these two. In addition, the interactions among different aspects of practice—for example, between teachers’ practices and students’ motivation, between teachers’ practices and school policies, between school practices and district or state policies—mean that various resources interact in complex and unknown ways, contrary to the simple linear additive specification of most production functions. The section ends with various suggestions, drawn from the reform literature, about how to measure teaching characteristics and student ability to learn.

The following sections detail the implications for research, for educators, and administrators, and policymakers. The potentially valuable directions for research include analyzing natural experiments where spending increases suddenly, to understand how such windfalls are actually used; analyzing self-conscious reform efforts that use resources in specific (and varying) ways; returning to the effective schools strategy in somewhat modified ways; and estimating more complex versions of educational production functions. The implications for practitioners include the need to determine what might be effective practice, and then the search for ways to fund it—a bottom-up or site-base approach to spending priorities.

For policymakers, the implication of the “new” school finance is that spending may be necessary but not sufficient to enhance outcomes. The challenge in policy is therefore to determine what might be necessary in addition—potentially, the restriction of spending in the manner of categorical funding, or the enactment of complementary reforms, or the development of leaders (like principals and the superintendents) with the requisite reform vision. Various recent failures in state and federal policies, like the likely ineffectiveness of reducing class sizes, provide some clues for alternative policy directions.

The “new” school finance is a difficult subject because it demands that funding be treated not as political spoils, nor as self- evidently effective, but as only one of the resources necessary to make schools effective. Developing the associated agendas for research, practice and policy will take sustained effort and a reformulation of thinking about resources. The alternative is to continue the current patterns in which expenditures in education keep expanding with little to show for them.